SECURITIZATION NOTES PAYABLE

Securitization notes payable represents debt issued by us in securitization transactions. In connection with the merger with GM, we recorded a purchase accounting premium that is being amortized to interest expense over the expected term of the notes. Amortization for the nine months ended September 30, 2012 and 2011 was $25.7 million and $54.9 million, respectively. At September 30, 2012, unamortized purchase accounting premium of $16.7 million is included in securitization notes payable. Debt issuance costs of $26.2 million and $16.3 million, as of September 30, 2012 and December 31, 2011, respectively, which are included in other assets on the consolidated balance sheets, are being amortized to interest expense over the expected term of securitization notes payable.

Securitization notes payable as of September 30, 2012, consists of the following (dollars in thousands):



Year of Transaction	Maturity Date ^(a)			Original Note Amounts					Original Weighted Average Interest Rate					Receivables Pledged		Note Balance At September 30, 2012
2008	October 2014	-	April 2015	$	500,000	-	$	750,000	6.0	%	-	10.5	%	$	281,734	$	104,823
2009	January 2016	-	July 2017	227,493		-	725,000		2.7	%	-	7.5	%	250,771		188,389
2010	July 2017	-	April 2018	200,000		-	850,000		2.2	%	-	3.8	%	1,394,077		1,234,762
2011	July 2018	-	March 2019	800,000		-	1,000,000		2.4	%	-	2.9	%	3,037,396		2,797,680
2012^(b)	June 2019	-	February 2020	800,000		-	1,300,000		1.5	%	-	2.9	%	4,973,626		4,662,831
														$	9,937,604	8,988,485
Purchase accounting premium																16,718
Total																$	9,005,203

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(a)	Maturity date represents final legal maturity of securitization notes payable. Securitization notes payable are expected to be paid based on amortization of the finance receivables pledged to the Trusts.


(b)	Includes private sale of asset-backed securities.

At the time of securitization of finance receivables, we are required to pledge assets equal to a specified percentage of the securitization pool to support the securitization transaction. Typically, the assets pledged consist of cash deposited to a restricted account and additional receivables delivered to the Trust, which create overcollateralization. The securitization transactions require the percentage of assets pledged to support the transaction to increase until a specified level is attained. Excess cash flows generated by the Trusts are added to the restricted cash account or used to pay down outstanding debt in the Trusts, creating overcollateralization until the targeted percentage level of assets has been reached. Once the targeted percentage level of assets is reached and maintained, excess cash flows generated by the Trusts are released to us as distributions from Trusts. Additionally, as the balance of the securitization pool declines, the amount of pledged assets needed to maintain the required percentage level is reduced. Assets in excess of the required percentage are also released to us as distributions from Trusts.

With respect to our securitization transactions covered by a financial guaranty insurance policy, agreements with the insurer provide that if portfolio performance ratios (delinquency, cumulative default or cumulative net loss) in a Trust’s pool of receivables exceed certain targets, the specified credit enhancement levels would be increased.

Agreements with our financial guaranty insurance provider contain additional specified targeted portfolio performance ratios that are higher than those described in the preceding paragraph. If, at any measurement date, the targeted portfolio performance ratios with respect to any insured Trust were to exceed these higher levels, provisions of the agreements permit our financial guaranty insurance provider to declare the occurrence of an event of default and terminate our servicing rights to the receivables transferred to that Trust. As of September 30, 2012, no such servicing right termination events have occurred with respect to any of the Trusts formed by us.